Consumer (Co-)Ownership in Renewables in Scotland (UK)

Abstract

Community and local ownership in RE are an integral part of Scottish climate change policy, energy policy, and its rural and community development policies. The Government has released a Community Energy Policy Statement, and has set a target for community and local ownership of RE of 500 MW by 2020, which was met in late 2015. As a result, the government’s Draft Energy Strategy 2017 sets out two further aims of 1 GW of community and locally owned energy by 2020, and 2 GW by 2030. Furthermore, consumer (co-)ownership received explicit recognition of its crucial role in the 2018 recast of the Renewable Energy Directive (RED II) as part of the Clean Energy Package. However, in the light of the UK’s decision to leave the EU, the transposition of the RED II into UK Law until 2021 is unsure, although it would be an important legislative impulse as it introduces a legal framework for consumer (co-)ownership. Distinguishing by the degree of ownership, there exist various models enabling community and individual investment, such as owner operator, commercial developer led, joint venture, and community developer—the first being a model of full community ownership and the last three being forms of shared ownership. The majority of community energy projects are fully community-owned and, unlike in many other countries, the dominant finance/development model employed is that of a ‘Development Trust’. Only approximately 5 per cent involve some form of shared ownership with a developer or community investment in a commercial project. Common options available are listed in the Governments’ good practice principles with an emphasis on (i) shared revenue, (ii) joint venture, and (iii) split ownership.